Next-gen working capital: Operational efficiencies that will delight your customers and your teams


The International Finance Corporation estimated that there’s a credit gap nearing US$10 trillion.

The high-cost nature of traditional lending ecosystems means high-value loans to large corporations, who make up only 1% of the market, are often the only profitable segment for lenders. This leaves a massive part of the market underserved. 

Today businesses spend on average 30 days applying for business finance and wait 90 days for finance to land in their bank accounts. But, that is changing - fast. It is widely accepted that SMEs and midcap organisations have a high risk adjusted return on capital (RAROC) potential.

It’s time to say goodbye to lending operations that are costly, inefficient and unscalable

In a lending ecosystem that is digital-first, cloud-native, API driven and composable, data flows effortlessly between systems, in real-time. For example, the data captured in CRM can be pushed to other systems as and when it’s needed - thus eliminating rekeying, manual imports and inconsistent formatting. Also, customer details that are captured in other systems can sync with CRM.

This not only provides lenders with a single customer view but also unlocks the opportunity for true automation and smart decisions across the entire loan journey.

We call this data-driven lending

James Binns, Global Head of Trade and Working Capital at Barclays Bank, says that the big banks are now willing to put their transaction engines and platforms onto externally hosted cloud lending platforms, with API gateways off them:

Once you’ve got the connectivity, then you can start adding different data feeds over a period of time, layering on the data you need to make more decisions.

Future-state lending ecosystem
Future-state lending ecosystem

The future-state lending ecosystem above, and similar models, have been making the rounds for a couple of years now, but lenders are still grappling with the change. Digital transformation is hard.

Where do you start? How do you know that this will solve your problems? How can you ensure its success? How do you build a business case that drives buy-in?

In this article, we will explore the operational efficiencies lenders should aim for in order to meet the working capital demands of businesses - regardless of their size. 

Modern lending technology automation checklist:

  • Data collection
  • Workflows and task management
  • Credit scoring
  • Fraud detection
  • Pre-assessment
  • Deal structuring
  • Credit memo creation
  • Document generation
  • Credit agreement
  • Facility monitoring

Fast, easy access to finance will become the norm in the next 3-5 years. Any lender who doesn’t have these automations in place, as a minimum, will find themselves losing market share rapidly.

Use cases: operational efficiencies that will delight your customers and your teams


Borrowers can pre-populate their application form by instantly and securely sharing their business information from other systems such as their accounting software. Lenders can bring in credit bureau information for the applicant as well as their customers and suppliers.

This change to the process can reduce the typical 30 hour application and 90 day wait for funds down to:

👩💻 4 minute application journey

💭 1 hour to a credit decision

✅ 2 hours to onboard

💰 24 hours to cash in the bank

These efficiencies may seem like a pipedream, especially when it comes to more complex lending like Asset Finance, Invoice Finance and Receivables Finance. But, lenders using modern lending technology are already seeing these efficiencies.

Relationship managers:

By removing the manual rekeying of information your relationship manager (RM) teams can focus on building deep relationships with more customers.

An integrated lending ecosystem provides RMs with easy access to up-to-date customer and application information allowing them to simply track the progress of their pipeline and identify which deals need their attention. Ultimately this reduces drop-outs and increases renewal rates.

The efficiencies the Trade Ledger platform will deliver mean our relationship managers will be able to focus more on supporting customers where it’s most needed, rather than being involved in time-consuming manual processes. 

- Graeme Sands, Head of Business Lending and Products, Virgin Money

Credit risk and underwriting:

Risk professionals don’t need to fear technology. Technology isn’t going to replace risk managers anytime soon, but it will enable risk assessments to be quicker and vastly more sophisticated, enabling lending in a much wider set of circumstances.

By automating the collection of newer, more context-rich data, technology can deliver decisions where there is an obvious ‘Yes’ or ‘No’ answer. This frees a risk manager to focus their time on more nuanced deals or to think and support the businesses they serve in a more strategic matter. There’s more on this in the third pillar, risk mitigation and compliance.

Businesses don’t want a lender that’s a ‘one size fits all’ sausage factory. Trade Ledger allows us to make nimble decisions to quickly understand each business and make an accurate call on funding.

- Jon Sutton, CEO, ScotPac (Australia and New Zealand’s largest non-bank SME lender)

Engineers and systems integrators:

Modern lending technology is built for seamless integrations. In the world of open APIs your team can launch new features and products without needing to stitch together disparate systems or spend months integrating.

A handful of technology players that are driving the future of connected lending ecosystems:

Technology cost of ownership is a topic on many lenders' agenda, for a deep dive into how lenders can reduce their technology cost of ownership click here.

Lenders working with Trade Ledger have launched digital invoice finance in just 90 days. Delivery times like this are fast becoming the industry standard. 

The shift to on-demand working capital is accelerating rapidly

Within three, or certainly five, years, the types of products, and the basis on which lenders compete to offer trade and working capital, will be very different from today. Many blockers have been overcome already or will be gone within three years. That’s how fast it’s going to happen.

Lenders who are actively working towards delivering the level of operational efficiencies mentioned above will win customer loyalty and market share.

Next steps:

  1. Use the structure above to compare against your existing operational output. This will help you identify where the biggest improvements can be made, what value these improvements will drive and how they will enhance your return on capital employed (ROCE) across the entire loan journey.
  2. Boosting your operational efficiencies is just one aspect of how lenders can add real value to their customers and organisation. In our Next-generation working capital – the $ multi-trillion opportunity report, we provide a framework for delivering real value across loan book growth, risk mitigation and compliance, and technology cost of ownership
  3. Get in touch and chat to us about the work we’ve delivered for a number of global multinational banks and specialised alternative lenders to transform their working capital offerings. 

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